Dealmaker: Walker & Dunlop Secures $77M for California Condos
Walker & Dunlop, Bethesda, Md., closed three transactions totaling $77.1 million for three Southern California condominium developments.
The properties include Element 436 in Koreatown, Enclave in Oxnard and ONYX in Beverly Hills/West Hollywood.
“These three transactions demonstrate the strength of condominium developments as an emerging business plan in Southern California, as minimal construction of these property types has occurred since the recession of 2008,” said Walker & Dunlop Senior Vice President Gabriel Weinert.
In Koreatown, borrower River Range LLC plans to convert 74 newly constructed rental units into Element 436, a for-sale condominium property. Weinert secured high-leverage non-recourse acquisition/construction financing from a family- sponsored investment manager and placed limited partner equity from high net-worth individuals. River Range LLC also received high loan-to-cost construction financing from a private equity fund for The Enclave, a 45-unit oceanfront condominium in the Channel Island Harbor.
Weinert also closed $15 million in debt and equity for The Barkley Group’s ONYX, a 14-unit condominium property scheduled for 2017 delivery.
In Peoria, Ill., Walker & Dunlop Senior Vice President Carolyn McMullen closed a $7.7 million loan for Glen Oak Towers, a federally subsidized high-rise building catering to senior citizens. The transaction enabled borrower Scott Canel & Assoc., Chicago, to rehabilitate an older Section 8 property using HUD’s 223(f) program, thus avoiding the 221(d)(4) program’s higher costs and rates. In addition, the borrower used the Ginnie Mae tax-exempt taxable swap structure to reduce transaction costs and obtain a lower interest rate.
McMullen said Glen Oak Towers represents the first transaction to convert a Moderate Rehabilitation Section 8 contract to a Project-Based Rental Assistance contract under HUD’s Rental Assistance Demonstration program.
Scott Canel & Assoc. Principal Scott Canel ranked the transaction among the most complicated in his nearly 30-year career in Low-Income Housing Tax Credit transactions. “It involved RAD-2, the creation of a new 20-year Housing Assistance Payment contract, tax-exempt bonds, tax credits and a complex rehab and underpinning all of this, a HUD 223(f) loan,” he said.
